Good morning. After the mornings excitement yesterday that followed the arrows with the rise to 6680 and then the drop back the rest of the day was flat as a pancake, what with the US being closed it felt like everyone packed up and went home at lunch time. Today might be the same as the US markets close at lunch time today for the Black Friday shopping extravaganza. (The US also has Cyber Monday in December but that’s another story). Black Friday today is basically a shopping day with massive discounts available. I was probably a tad optimistic expecting 6700 yesterday afternoon! News this morning is better for Spain with their S&P outlook raised to stable from negative. The Dax hit the 9400 level but the drop seemed a little subdued – I expected more bearishness I admit – though I was waiting for 9405 to be a little bit more exact. Just on the Dax, support is at 9364 today so would need to break that if 9400 is to hold as a short term top.
With prices failing to hit 6700 yesterday the 10 day Bianca channel has dropped to a high of 6673 and the 10 day Raff not much better at 6690, so with a downward short term trend, the bulls might struggle a bit at 6680 (mid way between them). 20 day Bianca is 6697, a short here with a stop above 6711 should be good to play today if seen.
Gold weakened off again after that bounce from 1228 the other day, but failing to break 1252, with yesterday’s high being 1246. If it doesn’t get back above that level then I think it could be heading for sub $1200. I am watching resistance at 1252, and have support at 1228, 1223 and 1180
Asia Overnight from Bloomberg
Asia’s benchmark stock index headed for the first monthly loss since August as GrainCorp Ltd. (GNC) plunged by a record after the Australian government rejected a takeover bid by a U.S. rival.
The MSCI Asia Pacific Index was little changed at 141.90 as of 2:10 p.m. in Hong Kong. Trading volume has slumped in the past two months after prices surged 6.4 percent in September. More than $8 trillion has been added to the value of global equities this year, the biggest increase since 2009, as central banks took steps to shore up economies worldwide.
“I would expect trading movements to follow fund managers book dressings rather than any specific news,” Evan Lucas, Melbourne-based market strategist at IG Ltd., said in an e-mail. “The fact volumes remain subdued in the fourth quarter and we are approaching seasonality issues with holidays etc., price moves are likely to be thin and easily corrected if they look overdone.”
The Asia-Pacific index jumped 9.7 percent in 2013 through yesterday, while falling 0.3 percent in November and rising 0.5 percent this week. It traded yesterday at 14 times estimated earnings, the highest since May, according to data compiled by Bloomberg. That compares with 16.3 on the Standard & Poor’s 500 Index and 15.2 for the Stoxx Europe 600 Index.
Futures on the S&P 500 rose 0.2 percent from the close on Nov. 27. U.S. exchanges were closed yesterday for the Thanksgiving holiday.
S&P
Have just put this in its own section so it’s a bit clearer but the resistance at 1808 that has been holding for a while now has been exceeded out of hours albeit not by much. If that holds true this morning then I still expect 1814 will be seen which could tally with the FTSE nearing that 6700 level and the Dax retesting 9400, possibly the 9440.
Not that you can ever accurately pick tops but these levels across these 3 indices are worthy of note. 6700 FTSE, 9440 Dax, 1814 S&P.
FTSE Outlook
My gut feel for today, as long at 6647 holds as support is for a rise to test those upper levels mentioned above around the 6680/6700 area. If 6647 breaks then 6628 and 6615 look like supports. All being said and done, its Friday, the US has a half day so we may be fairly flat lined a bit today. I do feel that initially we will get a bit of a rise, especially as the bears could have really gone to town yesterday on low volume. The 30 minuet EMAs aren’t giving much away so we are at a fairly crucial point, if 6647 holds then we get the rise, if it breaks then we could dip to 6628 fairly quickly. Might try some speculative longs at those support levels – 6628 and 6613 though I haven’t included them in the trade plan below as they would be punts.